Loblaw turns to self-driving vehicles for middle-mile delivery

Next month, Loblaw Cos. is slated to deploy a fleet of autonomous delivery vehicles in Toronto to provide short-haul, middle-mile logistics for its PC Express online grocery service.

Palo Alto, Calif.-based Gatik, which is supplying the self-driving technology under a multiyear partnership with Loblaw, said the rollout will mark the first autonomous delivery fleet in Canada. 

Starting in January, Gatik will provide Canada’s largest grocer with a contactless delivery solution for transporting multi-temperature goods from its automated picking site to stores across the greater Toronto area. The launch follows a successful 10-month on-road pilot in Toronto with one autonomous delivery truck.

“As more Canadians turn to online grocery shopping, we’ve looked at ways to make our supply chain more efficient. Middle-mile autonomous delivery is a great example,” Lauren Steinberg, senior vice president of Loblaw Digital, said in a statement. “With this initial rollout in Toronto, we are able to move goods from our automated picking facility multiple times a day to keep pace with PC Express online grocery orders in stores around the city.”

Plans call for Gatik to operate five trucks for Loblaw up to seven days a week, 12 hours a day, on five routes, using public roads with fixed pickup and drop-off locations. Gatik noted that all of the vehicles will have a safety driver as a co-pilot.

Related:Loblaw sees food retail sales growth soften in third quarter

Loblaw's deployment of the Gatik vehicles comes after a 10-month pilot in Toronto with one autonomous delivery truck.

To handle transport of goods for Loblaw’s online grocery service, Gatik fitted Ford Transit 350 box trucks with refrigeration units, lift gates and its proprietary autonomous self-driving software for urban, suburban and highway driving. 

The tech firm said that, to date, it has completed more than 30,000 revenue-generating autonomous orders for multiple customers across North America.

“Loblaw is one of Canada’s leading grocery retailers, and we are proud to be selected to play a key role in enhancing the safety and efficiency of its already robust supply chain,” commented Gautam Narang, co-founder and CEO of Gatik. “Retailers know the biggest inefficiencies in their logistics operations often exist in the middle-mile, typically between automated picking facilities and retail locations. This is where Gatik lives and succeeds, and is the reason we’re able to offer immediate value to our customers. We are delighted to partner with Loblaw in addressing this critical piece of their supply chain.”

Brampton, Ontario-based Loblaw reported last month that third-quarter e-commerce sales surged 175% across the grocery, pharmacy and apparel platforms, continuing the momentum from a 280% jump in the second quarter. The company said the gain reflects its online investments, including in everyday digital, connected health care, payments and rewards, and store pickup and home delivery. 

Related:Loblaw pilots more personalized advertising

In turn, Loblaw is bolstering its burgeoning digital media business. Last week, the food and drug retail announced the acquisition of digital marketing and analytics specialist Eyereturn Marketing, a Toronto-based unit of Torstar Corp. Loblaw noted that the transaction boosts its fledgling Loblaw Media digital marketing arm, launched in 2019. 

With Eyereturn’s technology and expertise, Loblaw Media will be able to better connect brands and consumers online through targeted ad campaigns and promotions, while also reducing the retailer’s reliance on third-party media technology, according to Loblaw. 

Leveraging purchase and customer data from Loblaw’s PC Optimum loyalty program and more than 2,400 stores across Canada, Loblaw Media uses transaction-based insights to help brands plan and deliver more relevant campaigns, in turn delivering more relevant ads to customers. Loblaw pointed out that PC Optimum provides its digital media agency with specific, anonymized target audiences based on real in-store and online purchase histories. 

“This acquisition is an important milestone for us, adding immediate capability and credibility to our growing media business,” stated Uwe Stueckmann, chief customer officer at Loblaw. “These team members are some of the best and brightest in the ad technology space. Together, we’ll take Loblaw Media to the next level, delivering outstanding campaigns with meaningful insights for our clients and promotions for our customers.”